We have ignored the Healthcare System in our country for decades and look where we are! Our Ignorance and tolerance of the so-called Market Driven Health Care has resulted in Disaster! The biggest culprit, those Corporate Executives , Insurance Companies,Lobbyists and our lawmakers, the politicians. All equally guilty of GREED! Although our government and the laws written have allowed an open door to Fraud, it is time to bring the Corporate Criminals & Politicians to Justice.

Tuesday, January 15, 2008

HCA INC/TN ; subpoenas requesting records

ITEM 3. LEGAL PROCEEDINGS.

FEDERAL AND STATE INVESTIGATIONS

In March 1997, various facilities of the Company's El Paso, Texas operationswere searched by federal authorities pursuant to search warrants, and thegovernment removed various records and documents. In February 1998, anadditional warrant was executed and a single computer was seized. The Companybelieves it may be a target in this investigation.

In July 1997, various Company affiliated facilities and offices weresearched pursuant to search warrants issued by the United States DistrictCourt in several states. During July, September and November 1997, the Companywas also served with subpoenas requesting records and documents related to laboratory billing, diagnosis related group ("DRG") coding and home health operations in various states. In January 1998, the Company received a subpoena which requested records and documents relating to physician relationships.

Also, in July 1997, the United States District Court for the Middle Districtof Florida, in Fort Myers, issued an indictment against three employees of asubsidiary of the Company. The indictment relates to the alleged falsecharacterization of interest payments on certain debt resulting in Medicareand CHAMPUS overpayments since 1986 to Columbia Fawcett Memorial Hospital, aPort Charlotte, Florida hospital that was acquired by the Company in 1992. TheCompany has been served with subpoenas for various records and documents.

The Company is cooperating in these investigations and understands it is atarget in these investigations.

In addition, several hospital facilities affiliated with the Company havereceived individual governmental inquiries, both informal and formal,requesting information related to reimbursement from government programs.

While it is too early to predict the outcome of any of the ongoinginvestigations or the initiation of any additional investigations, were theCompany to be found in violation of federal or state laws relating toMedicare, Medicaid or similar programs, the Company could be subject tosubstantial monetary fines, civil and criminal penalties and exclusion fromparticipation in the Medicare and Medicaid programs. Any such sanctions couldhave a material adverse effect on the Company's financial position and resultsof operations. See NOTE 15 of the notes to consolidated financial statements.

The Company is the subject of a formal order of investigation by theSecurities and Exchange Commission (the "Commission"). The Company understandsthat the investigation includes the anti-fraud, periodic reporting andinternal accounting control provisions of the federal securities laws.

QUI TAM ACTIONS

Several qui tam actions have been brought by private parties ("relators") onbehalf of the United States of America. To the best of the Company'sknowledge, the actions allege, in general, that the Company and certainsubsidiaries and/or affiliated partnerships violated the False Claims Act forimproper claims submitted to the government for reimbursement. The governmenthas declined to intervene in any qui tam actions filed to date.

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The matter of United States of America, ex rel. Scott Pogue v. AmericanHealthcorp, Inc., et al. (Civil Action No. 3-94-0515) was filed under seal onJune 23, 1994, in the United States District Court for the Middle District ofTennessee. On February 6, 1995, the United States filed its Notice of Non-Intervention and on that same date, the District Court ordered the Complaintunsealed. The relator contends that sums paid to Medical Directors by theDiabetes Treatment Centers of America and those who served as MedicalDirectors at a hospital or facility affiliated with the Company, were, infact, unlawful payments for the referrals of their patients.

A lawsuit captioned United States of America ex rel. James Thompson v.Columbia/HCA Healthcare Corporation, et al, was filed on March 10, 1995 in theUnited States District Court for the Southern District of Texas, CorpusChristi Division (Civil Action No. C-95-110). The relator claims that thedefendants (the Company and certain subsidiaries and affiliated partnerships)engaged in a widespread strategy to pay physicians money for referrals andengaged in other conduct to induce referrals, such as: (i) offering physiciansequity interests in hospitals; (ii) offering loans to physicians; (iii) payingmoney under the guise of "consultation fees" to physicians to guarantee theircapital investment; (iv) paying consultation fees, rent or other monies tophysicians; (v) providing free or reduced rate rents for office space; (vi)providing free or reduced-rate vacations and trips; (viii) providing incomeguarantees; and (ix) granting physicians exclusive rights to performprocedures in particular fields of practice. The lawsuit is premised onalleged violations of the False Claims Act, 31 U.S.C. (S)3729 et seq. Thecomplaint seeks damages of three times the amount of all Medicare or Medicaidclaims (involving false claims) presented by the defendants to the federalgovernment, a civil penalty of not less than $5,000 nor more than $10,000 foreach such Medicare or Medicaid claim, attorneys' fees and costs. Althoughexpressly permitted to do so, the United States has thus far declined tointervene in the case and assume prosecution of the claims asserted by therelator. The defendants filed a Motion to Dismiss the Second Amended Complainton November 29, 1995, which was granted by the Court on July 22, 1996. OnAugust 20, 1996, the relator appealed to the United States Court of Appealsfor the Fifth Circuit and, on October 23, 1997, the Fifth Circuit affirmed inpart and vacated and remanded in part the Trial Court's rulings.

On or around December 21, 1995, a matter entitled United States of America,ex rel. Roy Meidinger v. Lee Memorial Health Systems, Case No. 95-423-FTM-99D,was filed in the United States District Court for the Middle District Court ofFlorida, Fort Myers Division. In this matter, the plaintiff filed under seal,a False Claims Act case against approximately 2,500 health care providers andinsurance companies, including Columbia Southwest Regional Medical Center. OnDecember 16, 1996, the United States declined to intervene. In June 1997, theDistrict Court entered an order directing plaintiff to serve the defendants.In late November and early December 1997, each of the six defendants moved todismiss the Complaint. On January 20, 1998, plaintiff filed his opposition tothe defendant's motion to dismiss. The Court has not yet ruled on thedefendant's motions.

The matter of United States of American, ex rel. Sandra Russell; and SandraRussell in her own right v. EPIC Healthcare Management Group, and HearthstoneHome Health, Inc. d/b/a Continue Care Health Services, No. H-95-00151, wasfiled in the United States District Court for the Southern District of Texas,Houston Division, in January, 1995. This matter was filed under seal. TheComplaint alleges that the relator was required to submit claims, recordsand/or statements for Medicare reimbursement which were false. The governmentdeclined to intervene in May 1996, and the defendant moved to dismiss in May1997. No ruling has been made on the motion to dismiss.

The Company intends to pursue the defense of the Qui Tam actions vigorously.

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SHAREHOLDER DERIVATIVE AND CLASS ACTION COMPLAINTS FILED IN THE U.S.

DISTRICT COURTS

Since April 8, 1997, numerous securities class action and derivativelawsuits have been filed in the United States District Court for the MiddleDistrict of Tennessee against the Company and a number of its current andformer directors, officers and employees.

On August 26, 1997, the Court entered an order consolidating all of thesecurities class action claims into a single-captioned case, Morse v.McWhorter, Case No. 3-97-0370. All of the other individual securities classaction lawsuits were administratively closed by the Court. The consolidatedMorse lawsuit is a purported class action seeking the certification of a classof persons or entities who acquired the Company's common stock from April 9,1994 to September 9, 1997. The consolidated lawsuit is brought against theCompany, Richard Scott, David Vandewater, Thomas Frist, Jr., R. ClaytonMcWhorter, Carl E. Reichardt, Magdalena Averhoff, M.D., T. Michael Long, andDonald S. MacNaughton. The lawsuit alleges, among other things, that thedefendants committed violations of the federal securities laws by materiallyinflating the Company's revenues and earnings through a number of practices,including upcoding, maintaining reserve cost reports, disseminating false andmisleading statements, cost shifting, illegal reimbursements, improperbilling, unbundling, and violating various Medicare laws. The lawsuit seekscompensatory damages, costs, and expenses. Plaintiffs filed their Motion forClass Certification on February 11, 1998. The defendants' motions to dismissand motion for oral argument have been referred to the Magistrate Judge forconsideration.

On August 26, 1997, the Court entered an order consolidating all of thederivative law claims into a single-captioned case, McCall v. Scott, No. 3-97-0838. All of the other derivative lawsuits were administratively closed by theCourt. The consolidated McCall lawsuit is brought against the Company, ThomasFrist, Jr., Richard L. Scott, David T. Vandewater, R. Clayton McWhorter,Magdalena Averhoff, M.D., Frank S. Royal, M.D., T. Michael Long, William T.Young and Donald S. MacNaughton. The lawsuit alleges, among other things,derivative claims against the individual defendants that they intentionally ornegligently breached their fiduciary duties to the Company by authorizing,permitting, or failing to prevent the Company from engaging in various schemesto improperly increase revenue, upcoding, improper cost reporting, improperreferrals, improper acquisition practices, and overbilling. In addition, thelawsuit asserts a derivative claim against some of the individual defendantsfor breaching their fiduciary duties by engaging in insider trading. Thelawsuit seeks restitution, damages, recoupment of fines or penalties paid bythe Company, restitution and pre-judgment interest against the alleged insidertrading defendants, and costs and disbursements. In addition, the lawsuitseeks orders: (i) prohibiting the Company from paying individual defendantsemployment benefits, (ii) terminating all improper business relationships withindividual defendants, and (iii) requiring the Company to implement effectivecorporate governance and internal control mechanisms designed to monitorcompliance with federal and state laws and ensure reports to the Board ofMaterial Violations.

The matter of Landgraff v. Columbia/HCA Healthcare Corporation was filed onNovember 7, 1997, in the United States District Court for the NorthernDistrict of Georgia, Atlanta Division, Civil Action No. 97-CV-3381. The suitseeks certification of a class of all participants in the Columbia/HCA StockBonus Plan, alleging violations of ERISA. The suit alleges the Companybreached its fiduciary duty to plan participants, fraudulently concealedinformation from the public and fraudulently inflated the Company's stockprice through billing fraud and illegal kickbacks for physician referrals. OnJanuary 9, 1998, the parties stipulated to transfer venue of the case to theUnited States District Court for the Middle District of Tennessee. Defendantsfiled a Motion to Dismiss on March 6, 1998.

The Company intends to pursue the defense of these Shareholder Derivativeand Class Action Complaints vigorously.

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SHAREHOLDER DERIVATIVE ACTIONS FILED IN STATE COURTS

Several derivative actions have been filed in State Court by certainpurported stockholders of the Company against certain of the Company's currentand former officers and directors alleging breach of fiduciary duty, andfailure to take reasonable steps to ensure that the Company did not engage inillegal practices thereby exposing the Company to significant damages. TheCompany intends to pursue the defense of these shareholder derivative actionsvigorously.

Two purported derivative actions entitled Evelyn Barron, et al. v. MagdalenaAverhoff, et al. (Civil Action No. 15822NC) and John Kovalchick v. MagdalenaAverhoff, et al. (Civil Action No. 15829NC) have been filed in the Court ofChancery of the State of Delaware in and for New Castle County. The actionswere brought on behalf of the Company by certain purported shareholders of theCompany against certain of the Company's current and former officers anddirectors. On approximately August 14, 1997, a similar purported derivativeaction entitled State Board of Administration of Florida v. MagdalenaAverhoff, et al. (No. 97-2729) was filed in the Circuit Court in DavidsonCounty, Tennessee on behalf of the Company by certain purported shareholdersof the Company against certain of the Company's current and former directorsand officers.

The matter of Louisiana State Employees Retirement System v. Averhoff, et aland Columbia/HCA Healthcare Corporation, another derivative action, was filedon March 20, 1998, in the Circuit Court of the Eleventh Judicial Circuit, DadeCounty, Florida, General Jurisdiction Division, Case No. 98-6050 CA04. TheLouisiana State Employees Retirement System is the public pension fund of theState of Louisiana. The suit alleges breach of fiduciary duties resulting indamage to the Company's good will, business reputation and the ability toconsummate future mergers and acquisitions.

PATIENT/PAYER ACTIONS

The Company has from time to time received several purported class actionlawsuits which have been filed by patients or payers against the Companyand/or certain of its current and former officers and directors alleging, ingeneral, improper and fraudulent billing, coding and physician referrals, aswell as other violations of law.

The matter of Boysen v. Columbia/HCA Healthcare Corporation was filedSeptember 8, 1997, in the United States District Court for the Middle Districtof Tennessee, Nashville Division, (Civil Action No. 3-97-0936). The lawsuit,which seeks certification of a national class comprised of all persons orentities who have paid for medical services provided by the Company, alleges,among other things, that the Company has engaged in a pattern and practice of

(i) inflating diagnosis and medical treatments of its patients to receivelarger payments from the purported class members; (ii) providing unnecessarymedical care; and (iii) billing for services never rendered. The lawsuit seeksequitable relief in the form of an accounting, as well as damages, attorneys'fees and costs of suit. The Company filed its Answer on November 17, 1997.Plaintiff has filed a Motion for Class Certification, and the Company'sopposition to this motion was filed in March 1998.

The matter of Brown v. Columbia/HCA Healthcare Corporation was filed onNovember 28, 1995, in the Circuit Court of Palm Beach County, Florida, CaseNo. 95-9102 AD. This suit alleges that the hospital has charged excessiveamounts for pharmaceuticals, medical supplies, laboratory tests, medicalequipment and related medical services such as x-rays. The suit seekscertification of a nationwide class, and damages for patients who have paidbills containing allegedly excessive amounts for the allegedly unreasonableportion of the charges and attorneys' fees. The Company filed a Motion toDismiss on December 18, 1995, and an Amended Motion to Dismiss on January 3,1996. Plaintiff amended the Complaint and the Company filed an Answer anddefenses on June 19, 1996. On October 15, 1997, Harald Jackson moved tointervene in the lawsuit. The Court denied Jackson's Motion on December 19,1997. No class has been certified. Discovery is ongoing.

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On October 27, 1997, Colville v. Columbia/Palm Drive Hospital was filed inthe Sonoma County Superior Court, California, Case No. 217646. The suit seekscertification of a class comprised of uninsured patients treated at theCompany's hospitals and entities in California who have been treated andcharged different fees than any other patient. The suit alleges that theCompany fraudulently overcharged the plaintiffs and that it unlawfully chargesuninsured patients at a higher rate for the same services, compared topatients with insurance or Medicare. On March 6, 1998, the Company filed aDemurrer Motion and Motion to Quash. A hearing is set for May 13, 1998.

Doe v. HCA Health Services of Tennessee, Inc. dba Donelson Hospital fkaSummit Medical Center is a class action suit filed on August 17, 1992 in theFirst Circuit Court for Davidson County, Tennessee. This suit claims theCompany's charges for hospital services and supplies for medical services (ahysterectomy in the plaintiff's case) exceeded the reasonable costs of itsgoods and services, that the overcharges constitute a breach of contract andan unfair or deceptive trade practice within the meaning of the TennesseeConsumer Protection Act, and a breach of the duty of good faith and fairdealing under Tennessee statute and common law. In 1997, this case wascertified as a class action consisting of all past, present and futurepatients at Summit Medical Center. Defendant filed a Motion for SummaryJudgment relying upon the favorable decision of another Nashville CircuitJudge in a factually similar case. In March 1997, the Court denied the Motionfor Summary Judgment and has ordered the parties into mediation.

The matter of Douglas v. Columbia/HCA Healthcare Corporation is a classaction filed on March 5, 1998, in the Circuit Court of Cook County, Illinois,County Department, Chancery Division, Case No. 98 02942. This suit allegesthat defendants were involved in fraudulent and deceptive acts includingwrongful billing, unnecessary treatment and wrongful diagnosis of patientswith illnesses that necessitate higher medical fees for financial gain. Thismatter was served on March 18, 1998 and no answer has been filed at this time.

Ferguson v. Columbia/HCA Healthcare Corporation was filed on September 16,1997, in the Circuit Court for Washington County, Tennessee, Civil Action No.18679. This lawsuit seeks certification of a national class comprised of allthose who paid or were responsible for payment of any portion of a bill formedical care or treatment provided by the Company and alleges, among otherthings, that the Company engaged in billing fraud by excessively billingpatients for services rendered, billing patients for services not rendered ornot medically necessary, uniformly using improper codes to report patientdiagnosis, and improperly and illegally recruiting doctors to refer patientsto the Company's hospitals. Plaintiff filed a Motion for Class Certificationon September 16, 1997. On December 15, 1997, the Company filed a Motion forSummary Judgment. On January 28, 1998, plaintiff filed a Motion for Leave toFile a Second Amended Class Action Complaint to Add an Additional ClassRepresentative.

The matter of Hoop v. Columbia/HCA Healthcare Corporation was filed onAugust 18, 1997, in the District Court of Johnson County, Texas, Civil ActionNo. 249-171-97. This suit seeks certification of a class in Texas comprised ofpersons who paid for any portion of an improper or fraudulent bill for medicalservices rendered by any Texas facility owned or operated by the Company. Thelawsuit alleges the Company perpetrated a fraudulent scheme that consisted ofsystematic and routine overbilling through false and inaccurate bills,including padding, billing for services never provided, and exaggerating theseriousness of patients' illnesses. The lawsuit alleges the Companysystematically entered into illegal kickback schemes with doctors for patientreferrals. The Company filed its answer on November 7, 1997.

The matter of Jackson v. Columbia/HCA Healthcare Corporation was filed onDecember 23, 1997, in the Circuit Court, Palm Beach County, Florida, CivilAction No. 97-011419. The suit seeks certification of a national class ofpersons or entities that have paid for medical services,

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alleging the Company systematically and unlawfully inflated prices, concealedits practice of inflating prices and engaged in and concealed a uniformpractice of overbilling.

The matter of Johnson v. Plantation General Hospital was filed on August 5,1991, in the Circuit Court for the Seventeenth Judicial Circuit, State ofFlorida, Broward County, Case No. 92-06823 Div. 2. The suit alleges thehospital charged excessive amounts for pharmaceuticals, medical supplies andlaboratory tests. The suit sought certification of a class, a price reductionon all outstanding bills in the amount of the allegedly excessive portion ofthe charges, damages for patients who have paid bills containing allegedlyexcessive amounts for the alleged unreasonable portion of the charges andattorneys' fees. On September 18, 1995, the trial court certified the classand the Fourth District Court of Appeal affirmed. On October 22, 1996, thehospital filed a Motion for Summary Judgment on Counts II and III on the basisof the voluntary payment defense. The Court granted the motion on November 19,1997. Count I is still pending. Trial has been set for June 29, 1998.

The matter of Operating Engineers Local No. 312 Health & Welfare Fund v.Columbia/HCA Healthcare Corporation was filed on October 6, 1997 in the UnitedStates District Court for the Eastern District of Texas, Civil Action No.597CV203. The suit alleges four counts of violations of RICO. The alleged RICOviolations are based on allegations that the Company has employed one or moreschemes or artifices to defraud the plaintiff and purported class membersthrough fraudulent billing for services not performed, fraudulent overchargingin excess of correct rates and fraudulent concealment and misrepresentation.On October 22, 1997, the Company filed a Motion to Transfer Venue and toDismiss the Lawsuit on Jurisdiction and Venue Grounds because the RICO claimsare deficient. The motion to transfer was denied on January 23, 1998. Themotion to dismiss has not yet been ruled upon.

The Company denies the aforementioned allegations and intends to pursue thedefense of these actions vigorously.

While it is premature to predict the outcome of the qui tam, shareholderderivative and class action lawsuits, the amounts claimed may be substantial.It is possible that an adverse resolution, individually or in the aggregate,could have a materially adverse impact on the Company's liquidity, financialposition and results of operations. See NOTE 15 of the notes to consolidatedfinancial statements.

The Company believes the ongoing investigations, qui tam, shareholder cases,class action overcharging cases and related media coverage are having anegative effect on the Company's financial position and results of operations.However, the Company is unable to measure the effect or predict the magnitudethat these matters and the related media coverage could have on the Company'sfuture results of operations and financial position.

GENERAL LIABILITY CLAIMS

The Company is subject to claims and suits arising in the ordinary course ofbusiness, including claims for personal injuries or for wrongful restrictionof, or interference with, physicians' staff privileges. In certain of theseactions the claimants have asked for punitive damages against the Company,which are usually not covered by insurance. In the opinion of management, theultimate resolution of these pending claims and legal proceedings will nothave a material adverse effect on the Company's results of operations orfinancial position.

A class action styled Mary Forsyth, et al v. Humana, Inc., et al, Case No.CV-S-89-249-DWH, was filed on March 29, 1989, in the United States DistrictCourt for the District of Nevada (the "Forsyth" case). Plaintiffs are twoclasses of individuals who paid for, or received coverage under, groupinsurance policies sold in the State of Nevada by Humana Insurance. Theyallege violations

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of antitrust laws, ERISA and RICO which arise from the sale of the policiesand from incentives provided under the policies for insureds to use HumanaSunrise Hospital in Las Vegas. In 1993, the United States District Courtgranted summary judgment dismissing most of plaintiff's claims but grantedplaintiffs judgment on one claim that the client assesses as having a maximumexposure of under $4 million, plus attorney's fees. Plaintiffs appealed to theUnited States Court of Appeals for the Ninth Circuit which, on May 23, 1997,affirmed the judgment on the ERISA claims; reversed as to the antitrustclaims; and reversed in part as to the RICO claims, but affirmed the DistrictCourt's grant of summary judgment limiting RICO damages to three times theERISA damages, with exposure assessed at under $12 million. Plaintiffs claimapproximately $133 million in antitrust damages that is subject to statutorytrebling. Humana has petitioned the Supreme Court for a Writ of Certiorari onthe RICO claims, which is pending. The antitrust claims have been remanded tothe United States District Court in Nevada. Trial of these claims is stayedpending a decision on the Petition for Writ of Certiorari. Humana has filed aMotion for Summary Judgment on all remaining antitrust claims raising issuesthat were not reached by the District Court. The court vacated the Februarytrial date and set oral argument for January 30, 1998. The Court has orderedthat a status report be filed on March 23, 1998.

On December 4, 1997, a lawsuit captioned Florida Software Systems, Inc., aFlorida corporation v. Columbia/HCA Healthcare Corporation, a Delawarecorporation, was filed in the United States District Court for the MiddleDistrict of Florida (Civil Action No. 97-2866-C.V.-T-17b). The lawsuit allegesthat the Company breached an agreement under which Florida Software Systems,Inc. was allegedly granted the exclusive right to provide medical claimsmanagement for certain claims made by the Company for payment to any thirdparty payors in connection with the rendition of medical care or services. Thelawsuit alleges claims for fraud, breach of implied contract, and breach ofcontract. The lawsuit seeks compensatory and punitive damages, attorney's feesand costs of the suit. The Company believes that the allegations in theComplaint are without merit and intends to pursue the defense of this actionvigorously.

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About Me

I prefer to remain hopeful with the notion "Justice for ALL" , around the world. I believe that education is the key to peace and justice.Too much of the small stuff is focused on in mainstream media opposed to the reality of life in a Global World.
The US educational system is declining in the world ranking.
Our Health Care System is a Market-Driven System and as usual, with humans, the superior animal on this planet, have not been monitored. Humans need to be monitored.
CORPORATE CONTROL,Greed,De-regulation of Humans, Our elected and appointed Politicians and CORRUPTION has allowed our country to get to this point of destruction! We need to remember that the founding fathers created this country by it's government "FOR THE PEOPLE, BY THE PEOPLE" which has been transformed into a free-for-all.This is mycountry and the only country I can obtain a passport for, (legally anyway)thus I will try to do my part, as a citizen of my country to ensure it remains "We the people, for the people, by the people"!Just like our FOUNDERS intended it to be!